We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
23 August 2018
The New Zealand Commerce Commission's (NZCC's) position towards gun jumping is that "while parties to proposed mergers must naturally engage with each other to explore the merits of a transaction prior to binding themselves and consummating a deal", pre-merger discussions and coordination concerns can arise if:
Detailed knowledge of a competitor's pricing, costs, strategic plans and other core material can hamper the competitive dynamic that once prevailed, especially in markets where the parties to a proposed merger are each other's closest competitors or where the information exchanged can be used readily with long term anticompetitive consequences.
The NZCC brought gun jumping proceedings in 2008. In that case, the High Court ordered that the merger parties pay penalties totalling NZ$100,000.(2)
Businesses contemplating an M&A transaction with their competitors must bear in mind the following competition law considerations:
This has important implications for structuring due diligence discussions, drafting pre-completion conduct of business and material adverse change clauses and undertaking pre-completion integration planning activities.
For further information on this topic please contact Troy Pilkington, Sarah Keene or Craig Shrive at Russell McVeagh by telephone (+64 9 367 8000) or email (email@example.com, firstname.lastname@example.org or email@example.com). The Russell McVeagh website can be accessed at www.russellmcveagh.co.nz.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.